Outsourcing group Mouchel feels the pressure as work dries up

By Peter Campbell

Last updated at 10:34 PM on 19th December 2011

Enlarge   Embattled: Mouchel has seen a torrid 12 months

Embattled: Mouchel has seen a torrid 12 months

Embattled outsourcing group Mouchel issued yet more bad news to the market yesterday, seeing out a torrid 12 months for the company.

The group’s pipeline of work, from managing motorways to providing back office staff, has dropped by almost 30 per cent after it struggled to win big contracts.

Chief executive Grant Rumbles warned the beleaguered group would be unlikely to appeal to new clients until it cleared up its balance sheet, which could take until April.

The latest blow comes after a year that has seen rejected takeover bids, resignations of the chief executive and chairman, a profits warning, a tripling of annual losses and 91 per cent wiped off the value of the shares.

Mouchel is now valued at just 6.7m – lower than the price tag of many of the contracts for which it is bidding.

The value of possible future work dropped from 2.2bn in July to 1.6bn at the end of November after the firm lost out on a major 400m contract with West Sussex Council, Mouchel said yesterday.

 

Rochdale Council is also in talks with the company about cutting short its contract for back office work, which could cost 130m in lost income.

Rumbles said Mouchel ‘had little chance of winning long-term contracts from new clients’ until the balance sheet was put back in order.

Rumbles, who took the helm in October after Richard Cuthbert left on the back of a profits warning, has launched a rescue plan.

Compiled by Ernst and Young and expected to be ready by March, it is likely to involve job cuts.

Since the group last month announced its annual losses had tripled to 64.8m, shares have halved. Yesterday they closed 0.25p higher at 6.25p.

 

No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards.

Your name and location will appear next to your comment.
You have 1000 characters left.
Libellous and abusive comments are not allowed. Please read our House Rules.
For information about privacy and cookies please read our Privacy Policy.
Terms